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RAAA warns of cost increases for regionals after carbon tax announcement

written by australianaviation.com.au | July 12, 2011

Rex has warned of the impact of the carbon tax. (Seth Jaworski)

The Regional Aviation Association of Australia (RAAA) has criticised the federal government’s new carbon tax, saying fuel hikes of six cents per litre “will add millions of dollars to regional operators’ costs”.

“The Prime Minister claims that the carbon tax is aimed at the big polluters, but the regional aviation industry contributes around 0.2 per cent of the nation’s total carbon emissions. The fact that the tax is being applied via the aviation fuel levy to regional aviation, an industry that barely emits carbon and which actually acts as an alternative to other carbon producing transport options, makes a mockery of the Prime Minister’s claim,” RAAA CEO Paul Tyrrell argued.

The RAAA also said that a lack of alternative fuel options would mean regional operators “cannot change their carbon emission behaviour”, unless they pull out of the industry all together.

Regional Express (Rex) is one regional carrier that has strongly criticised the carbon tax and other government decision which impact regional aviation, saying that the removal of the en route rebate scheme for regional airlines, the additional fuel excise and “increased security at regional ports” as factors which would equate to a loss of at least $6 million per annum for the airline.

“Rex has already announced in its release of 1 June 2011 that the outcome of these measures could be the loss of air services to half a dozen marginal regional ports like Taree and Grafton,” Rex COO Chris Hine warned.


“I foresee many regional operators without the financial strength and diversification of the Rex Group being forced out of business once these take effect after 1 July 2012. Those surviving will have to cut back on marginal routes in order to remain in business. This will unfortunately mean that some regional communities will suffer the loss of their essential air services,” Hine added, calling on the federal government to “strongly reconsider its position on regional air services”.

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Comment (1)

  • darcy maine


    Darcy Maine, General Manager, Heli Experiences (Commercial Helicopter Carrier)

    The New Aviation Fuel Rebate Scheme (AFRS) effective July 1st 2013

    The Federal Government will introduce an aviation fuel rebate scheme for Australian based Commercial Aviation Carriers who play a pivotal role in Australian tourism, freight, supply chains, FIFO and passenger carriage for city-regional sectors, offshore and remote communities.

    Even with the latest Diesel fuel rebate being cut back, the mining industry and primary producers still receive over 30c a diesel litre. The Mining Industry alone (who really need the leg up!) receives almost half of all Diesel fuel rebates and we are talking rebates to Mining Companies of over a Billion $AU annually. (Rail and Marine between them receive around Half a Billions Dollars annually)

    Aviation is eligible for a similiar fuel rebate/subsidy. A level playing field for all means a rebate will be made available on aviation fuel.

    The diesel rebate scheme stated objective is
    “The primary purpose of the scheme is to maintain competitiveness in key export industries, such as mining and agriculture, in a manner consistent with the government’s broader fiscal objectives.”

    Aviation is a Key Export Industry, In fact Tourism is Australia’s 2nd Biggest Export after Mining. Additionally Aviation plays a key role in the agriculture and mining sectors. To be eligible for the AFRS a company would need to prove
    a) They are a commercial carrier and hold an air operators certificate
    b) They actively provide commercial flights for regional farming and mining communities
    c) They actively participate in the carriage of International and domestic passengers/freight
    d) That fuel is used for carriage within Australia states and territories.

    The new Aviation fuel rebate will be positioned between the current diesel rebate and the current like fuels rebate, so approximately 22c per Litre. Aviation fuel for private use will not be eligible for the AFRS

    In case you were wondering, the above AFRS is not real and is an opinion only. But feel free to bring it up in your next political debate.There is no valid reason for Aviation to be left holding the door open, whilst the Mining Companies rush in with their snouts in the trough. Who really needs the help? If we could use Diesel….we would. Does the government and the broader populace really want us to stop flying? I don’t think so.

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